Power and New Energy Business Strategies - Fuji Electric · Power and New Energy Business Strategies ... Renewable Energy 1,722 3,147 Wind ... Corporation (subsidiary of Sojitz Corporation)

©2017 Fuji Electric Co., Ltd. All rights reserved. 11

May 25, 2017Fuji Electric Co., Ltd.

Power and New Energy Business Group

Power and New EnergyBusiness Strategies

©2017 Fuji Electric Co., Ltd. All rights reserved.

■Business Overview

■Review of FY2016

■ FY2017 Management Plan

2

Contents

・Business Policies・Business Plan・Market Trends・Priority Measures・Capital Investment / Research and Development


Business Overview

3


Business Overview

Contribute to the realization of a sustainable society by stably creating safe and secure energy~Develop businesses with maximized environmental performance, efficiency, economic

benefits, value, and innovation~

Hydro power

Wind powerSolar power

Cover wide range of output from small- to

large-capacity

Thermal power

4

Fuel handling equipment and waste treatment

Fuel Cells

Nuclear power-related

equipment

Geothermal Power

Renewable and new energies

Cooperate with VoithHydro of Germany.Strength in low-head hydropower generation technologies

Cover wide range of output from small- to large-capacity (flash / binary)

Provide high-performance, highly reliable industrial phosphoric acid fuel cells

EPC (engineering, procurement and construction ) and system equipment created using power electronics technologies


Review of FY2016

5


8.2% 8.0%

7.3 7.5

FY2015 FY2016

88.9 93.8

FY2015 FY2016

113.9

83.7

Review of FY2016

Initiative Results in FY2016● Expanded after sales businesses through acquisition of RTS● Finished construction of first binary geothermal power plant● Continued receiving orders and sales for hydroelectric power generation facilities● Completed delivery of large-scale order for solar power generation facilities

Challenges to Be Tackled in FY2017● Expansion of orders for thermal, geothermal, and solar power generation facilities

Operating Income / Operating Margin (Billion yen)

Net Sales (Billion yen)

6

Change+4.9

Change+0.2

Results Results

Amount of Orders Received (Billion yen)

Change-30.2

Thermal Power

Renewable Energy, Others

Results ResultsFY2015Results

FY2016Results


FY2017 Management Plan

7


Business Policies

Pursue stable and continuous business growth by accurately addressing increase in power demand (particularly for renewable energy) with integrated operation structure specializing in power plants and consolidating related sales divisions

● Expand orders (thermal, geothermal, and solar power generation facilities)

● Secure stable earnings by expanding after sales businesses

● Enhance project management capabilities

8


73.1 78.2

20.7 22.3

FY2016 FY2017

93.8 100.5

8.0% 6.5%

FY2016 FY2017

7.5 6.5

FY2016 FY2017

93.8 100.5

FY2016 FY2017

83.7

112.7

Operating Income / Operating Margin (Billion yen)

Net Sales (Billion yen)Amount of Orders Received (Billion yen)

Business Plan

Net Sales in Japan / Overseas (Billion yen)

9

Change+6.7

Change+6.7

+1.6

+5.1

Change-1.0Overseas

Japan

22% 22%Ratio of Overseas Sales

Results Management Plan

Change+29.0

Thermal Power

Renewable Energy, Others

Results Management Plan

Results Management Plan Results Management Plan


Power Generation Facilities—Market Trends (Global)

Global Power Generation Capacity

6,117Nuclear

Thermal

8,371

Renewable energy

● Annual growth rate (CY2014–CY2025) of 2.1% for global energy demand*

－Developed nations: 0.7% annual growth

－Emerging nations: 3.1% annual growth

● Improvement of economic performance through higher efficiencies and reduction of environmental impact

● Promotion of geothermal power generation plant introduction by government measures and subsidies－Rising demand in Africa following trend in Indonesia

Continuing global growth in electricity demand and increasing installation of generation facilities

（GW）

* Source: IEA World Energy Outlook 2016 10

Of Which, Renewable Energy

1,722

3,147

Wind

SolarGeothermal

Other

（GW）

Primarily China, Americas, and Asian region

Primarily China, Europe, and AmericasHydro

CAGR2.9％ CAGR

5.6％

CY2014 CY2025 CY2014 CY2025


Thermal Power—Priority Measures

■Continually acquire orders for thermal power generation (IPP, PPS)* in Japan (acquire additional orders from existing customers and approach new customers)

・Advance ongoing initiatives related to combined-cycle and ultra-supercritical coal-fired thermal power generation plants

■Expand orders in Asia and the Near and Middle East through acquisition of new customers (utilize bases and collaborate with local partners)

FET-AR

KN

HMN

FET-R

Compatible range spanning from sub-critical to ultra-supercritical(~300bar / ~630℃)

High performance at sub-critical levels(Compatible with high temperatures)

100 200 300 400 500 900

（ＷＨ）

Various medium-capacity reheat turbines compatible with different capacities and usage conditions

■Promote development ventures for bolstering product lineup and increasing efficiency・Expand range of application of reheat turbine model series (FATR)・Achieve compatibility with high-temperature and high-pressure plants to realize increased cycle efficiency

■Promote extensive risk management and secure income by enhancing project management capabilities

（ＭＷ）

＜Reheat Turbine Product Lineup＞

FATR

11* IPP: Independent power producer, PPS: Power producer and supplier


Geothermal Power—Priority Measures

■Continue acquiring orders in Asia and expand orders in the African and Central and South American markets

・Coordinate with existing partners (Asia) and new partners (Africa and Central and South America)

・Improve plant efficiency

■Expand orders for flash and binary geothermal power generation facilities and hot spring power generation facilities in Japan・Leverage existing track record to promote sales of binary geothermal power generation facilities

Takigami Binary Geothermal Power Plant of Idemitsu Oita Geothermal Co., Ltd.

・Start of commercial operation: March 1, 2017

・Location: Kokonoe Town, Kusu-gun, Oita Prefecture

・Generation capacity: 5,050 kWAnnual generation capacity: 31 million kWh

・Generation conducted utilizing hot water exhaust from Takigami Power Station of Kyushu Electric Power Co., Inc.

＜Binary Geothermal Power Generation＞Robust product lineup covering capacities up to and exceeding 10 MW

12


Expansion of After Sales Businesses(Thermal and Geothermal Power)

■Complete global service network and enhance capabilities of each base■Convert to proposal-based approach for maintenance and repair projects

・Expand lineup of offerings for optimizing plant lifecycles・Bolster service lineup and broaden scope (local repair, construction)

■Establish dedicated sales divisions for after sales services and dedicated technological proposal divisions

■Cultivate local engineers

★★ ★

★

★ＲＴＳＬＬＣ

Portion of total sales attributable to after sales businesses (thermal and geothermal power): 30% on average over past 3 years → 40% in FY2018

Indonesia

Taiwan

【Core production base】Kawasaki Factory

Middle East (FY2017)

米国U.S.

★ After Sales Service base

★

米国Columbia

ＦｕｊｉＲＴＳＬａｔｉｎＡｍｅｒｉｃａＳＡＳ

13


■Steadily advance initiatives in relation to after sales services for existing power plants (including output increases)

・Promote output increases at existing power plants by upgrading runners and generators while also performing periodic maintenance

■Expand orders for S&B projects and new power plants taking advantage of FIT scheme・Proactively seek to acquire projects from power companies, enterprise bureaus, and private-sector companies

■Differentiate operations by utilizing new, eco-friendly technologies・Minimize sizes of hydro servos, water lubricated bearings, hydraulic equipment, etc.

Akiha No. 1 Power Station of Electric Power Development Co., Ltd.・Turbine type: Vertical Francis turbine (2 units, 22.6 MW capacity)・Start of operation: May 2017 for No. 2

May 2018 for No. 1 (tentative)

Hydro Power—Priority Measures

【Turbine and Generator Upgrades】【Turbine Runner Blade Upgrade】

Nishi-Kadohara Power Station No. 3 of Hokuriku Electric Power Company・Turbine type: Vertical diagonal flow water turbine (1 unit, 49.5 MW capacity)

・Start of operation: March 2017

- S&B: Scrap & build FIT: Feed-in Tariff


● Only 27% of approved generation facilities operational (as of December 31, 2016)● Ongoing demand for construction expected to last through 2018, but number of projects to

decline gradually following abolition of approval system

15

(MW)

Japanese Mega Solar Facility Approval and Operational Status

Approved in FY2012（FIT ¥40/kwh）





As of December 31, 2016Operating capacity：10,666MWUtilization ratio： 27.3％

■Mega solar facility approved capacity■Mega solar facility operating capacity

Mega Solar—Market Trends

FY2012 FY2013 FY2014 FY2015 FY2016

Source: Agency for Natural Resources and Energy


Solar Power—Priority Measures

16

■Step up initiatives targeting large-scale EPC projects・Acquire orders for large-scale mega solar projects

Advance order acquisition activities for projects that entail attached electricity storage facilities

・Thoroughly management progress of large-scale mega solar projects and reduce costs

■Increase sales volumes through the introduction of new products・Expand sales volumes of system equipment by launching new power conditioning sub-

systems (PVI1000BJ-3P/1000)

■Prepare for overseas expansion of solar power operations (target Asian market as first step)

・Coordinate with overseas sales companies and develop products for global market

Mega solar plant in Hikari City, Yamaguchi Prefecture owned by Hikari Energy LLCEPC project with annual generation capacity of 14 MW completed in January 2017

Kamikita Rokkasho Solar Power Plant of Mirai Power (Kamikita Rokkasho) Corporation (subsidiary of Sojitz Corporation)EPC project with annual generation capacity of 51 MW completed in March 2017


Wind Power, Fuel Cells, Nuclear Power-Related Equipment—Priority Measures

17

■ Wind Power・Promote sales targeting EPC projects for small-

scale plants that are exempt from environmental assessments

■Fuel Cells・Utilize patents of Fuji N2telligence to promote sales in

German fire prevention market through collaboration with fire prevention equipment manufacturers

・Quickly launch SOFCs* that will serve as high-efficiency distributed power sources (FY2018)

■Nuclear Power-Related Equipment・Enter into plant decommissioning field with Europe’s

cutting-edge solidification technology (SIAL®)*・Steadily produce MOX fuel manufacturing equipment

compatible with new standards

100 kW fuel cell for cold storage warehouse of Wolf Butterback KG (completed in 2016)

Fuel Cell Delivered in Germany

SIAL® solidified body

SIAL® solidified sample

* SIAL® is a registered trademark of AMEC Foster Wheeler plc of the United Kingdom.

Wind Power Generation System Delivered

Nishime wind power plant of Fuji Green Power Co., Ltd.

* SOFCs: Solid oxide fuel cells


Capital Investment / Research and Development

・Manufacturing equipment at Kawasaki Factory (rationalization, etc.)

・Enhancement of equipment at RTS

・Efficiency increases for thermal turbines

・Development of new power conditioning sub-systems for solar power

・Next-generation fuel cell (SOFC) development

Capital Investment (Billion yen)

Management PlanResults

Research and Development (Billion yen)

18

Invest in strengthening manufacturing capabilities and developing competitive, high-value-added products to continually and stably expand business

Change+0.4

Change+0.3

* R&D expenditure figures above represent expenditures that have been allocated to segments based on theme and may therefore differ from figures contained in consolidated financial reports.

Management PlanResults


Disclaimer

1. Statements made in this documents or in the presentation to which they pertainregarding estimates or projections are forward-looking statements based on the company’s judgments and assumptions in light of information currently available. Actual results may differ materially from those projected as a result of uncertaintiesinherent in such judgments and assumptions, as well as changes in businessoperations or other internal or external conditions. Accordingly, the company gives noguarantee regarding the reliability of any information contained in these forward-looking statements.

2. These documents are for information purpose only, and do not constitute an inducement by the company to make investments.

3. Unauthorized reproduction of these documents, in part or in whole, is prohibited.

Documents

Power and New Energy Business Strategies - Fuji Electric · Power and New Energy Business Strategies ... Renewable Energy 1,722 3,147 Wind ... Corporation (subsidiary of Sojitz Corporation)